In the Short Run, a Decrease in the Federal Funds

question 61

Multiple Choice

In the short run, a decrease in the federal funds rate by the Fed

• A) lowers the real interest rate, decreases investment, and shifts the AD curve rightward.
• B) lowers the real interest rate, increases investment, and shifts the AD curve leftward.
• C) raises the real interest rate, decreases investment, and shifts the AD curve rightward.
• D) None of the above answers is correct.

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Definitions:

Multiple Approach-Avoidance Conflict

A psychological conflict that occurs when a person is faced with a decision that has both attractive and unattractive elements.

Avoidance-Avoidance Conflict

A psychological conflict that occurs when an individual must choose between two negative stimuli or situations.

Avoidance Goals

Objectives aimed at preventing undesirable outcomes or experiences.

Mastery Goals

Objectives focused on developing competence or mastering a skill or subject, rather than on comparing oneself to others.